- When you lease a vehicle, there is never a worry about being "upside-down" or "under water" on your auto loan. This often happens on a purchase because vehicles tend to depreciate faster than they can be paid for. Leasing a new vehicle will transfer all liability for depreciation from you to the lease holder. If your vehicle is worth much less than the residual value at the end of the lease, it is the lease holder's loss, not yours.
- Because you are not paying for the entire vehicle, but rather paying to use it for a specified amount of time, leasing usually results in much lower payments than a traditional purchase option. When leasing a car, you are only paying for the estimated depreciation during the lease period; thus, vehicles with higher resale values will usually have much lower payments.
- Most leases are for 24 to 36 months; most modern vehicles have at least a 36-month bumper-to-bumper warranty, completely eliminating the possibility of having any unplanned out-of-pocket expenses. The most you will pay for when leasing is regular maintenance, such as oil changes, tire rotation or possibly new tires, depending on the mileage you accrue during the lease.
- Leasing a new car allows you to get a new car every few years, almost eliminating the possibility of driving an older, out-of-date vehicle. Leasing a new vehicle will usually ensure you have the latest safety and technological features. When you buy a car under a traditional purchase, you are committing yourself to that vehicle for a much longer period of time, unless you can afford to lose your shirt on the vehicle value.
- If you are the owner of a business, or if you are self-employed, leasing a car may carry some valuable tax deductions for you. The IRS generally allows deductions and write-offs for equipment leasing, and automobiles used for business are usually included. Restrictions do apply, depending on vehicle usage and classification, so make sure you check with the IRS first.